When divested of most “tech” stocks, the remaining constituents of the S&P 500 underperform relative to broad market. Concurrently, the tech-heavy Top 50 of the S&P 500 significantly outperforms the broad market.

This implies that purchasing the leading constituents of the broad market is a better proposition than the broad market. However, there is a matter of diversification. Instead of equities, commodities have provided an edge via market-beating behaviour in the year. To indicate this, there are four fully-collateralised UCITS-eligible Exchange-Traded Commodities (ETC) that European investors can tap into:

• The Copper ETC (CULS) which provides a passive total return exposure to U.S.-listed copper futures;

• The Natural Gas ETC (NGLS) which provides a passive, total return exposure to front-month Natural Gas futures traded on NYMEX;

• The Brent Oil ETC (1BRN) which provides a passive, total return exposure to front-month Brent Crude Oil futures traded on ICE

• The WTI Oil ETC (WTI) which provides a passive, total return exposure to front-month WTI Crude Oil futures traded on NYMEX

When considered against the Top 50 of the broad market as well as the bulk of the market minus “tech”, there are some clear outperformers in the commodities space.